BUDAPEST: Central European currencies were mostly stable on Wednesday, with the Hungarian forint trading near a two-year low as investors eyed key US data as well as US president-elect Donald Trump’s statements for clues on his future policies.
The forint was a touch weaker versus the euro, down 0.04% on the day and trading at 415.15 after falling to a two-year low at 416.50 on Monday among uncertainties about the trade tariff plans of US president-elect Donald Trump.
The dollar slid on Monday following a report that Trump’s aides were exploring plans to apply trade tariffs only to sectors seen as critical to US national security, but the currency made up some ground after Trump denied the report.
Forint steady before Hungarian rate decision, zloty eases
On Wednesday, the dollar pushed higher for a second day after strong US data drove a rise in bond yields and pared some bets on Federal Reserve rate cuts.
“Markets are waiting for Trump’s inauguration to find out what statements are just scaremongering and what is really going to happen. This uncertainty is moving the dollar and that is dragging the forint along with it,” an FX trader in Budapest said.
“And it is obvious that the forint is still the black sheep of Central European currencies, losing its value while the crown and the zloty are mostly stable,” she said.
The forint, the region’s worst performer in 2024 as it lost about 6.5% versus the euro, has been underperforming its peers since the start of 2025 once again and lost nearly 1% since the start of the year.
The Polish zloty slid 0.08% and was trading at 4.268 per euro, giving up some gains after trading near a five-year-high in the previous session.
The currency firmed to its strongest since Feb. 2020 at 4.2460 on Monday, when some regional markets, including in Poland, were closed.
“The market interest rate disparity between the Polish economy and the euro zone may narrow slightly in the coming days,” Bank Millennium wrote in a client note.
“Despite this, the rather distant prospect of interest rate cuts in Poland will… be an anchor protecting the zloty from a possible weakening at the start of the new year,” they said. Elsewhere, the Czech crown was up 0.06% and trading at 25.11 to the euro.
“For now, EUR/PLN and EUR/CZK seem to have no intention of catching up with the EUR/USD slide from late last year and in recent days,” ING wrote in a note.
“The focus will remain on the local story regardless of the global context. Rates and monetary policy play a major role for now and a hawkish shift by both central banks will keep currencies supported going forward,” they wrote.
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